Retail giant Pick n Pay said it will embrace the recommendations of the Competition Commission report and not enforce exclusivity contracts in shopping malls which have locked the smaller players for years.
The practice over the years has been that the anchor tenant at malls, often large grocery retailers, are in a power position to negotiate a long term trading exclusivity which the landlord will impose on other tenants in the shopping centre.
The impact on the remaining tenant mix is that they will not be allowed to trade in some of their services and have a limited offering in that shopping centre so that the landlord can give effect to the anchor tenant’s exclusivity
Gareth Ackerman, chairman of Pick n Pay, said the retailer will not seek to enforce any exclusivity agreement against a small or speciality retailer in any centre in which it operates.
“We have had an excellent dialogue with the Competition Commission, and will seek to finalise a commitment with them,
“I hope that, after the current crisis, government and the competition authorities give due priority to stimulating healthy competition. This will enable us to create the jobs and transform the economy in the way is desperately be needed,” h said.
The Competition Commission’s grocery retail market inquiry in November published its final report on findings and recommendations.
The Commission found that the formal grocery sector has high levels of concentration – with Shoprite, Pick n Pay, Spar and Woolworths together having a 72% market share.
The regulator then recommended that supermarket chains must conclude agreements with the Competition Commission to cease the enforcement of exclusivity provisions in long-term lease agreements in a period of six months (From November).
However, the Department of Trade and Industry extended the deadline by three months to August due to COVID-19.
